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Ireland’s new political face

The new Prime Minister of Ireland Leo Varadkar. Photo: Reuters

Irish politics are undergoing big changes not very different from those being experienced by other EU countries like France. The new Prime Minister of Ireland will be Leo Varadkar, a 38-year-old doctor who has served as minister under the outgoing Prime Minister Enda Kenny who resigned amid feuds within the centre right Fine Gael party that leads a coalition government in Dublin.

The popular media analysis of the meaning of Varadkar’s appointment as Prime Minister have, as is to be expected, generally been on rather superficial issues, such as that he is young, openly gay, and comes from an ethnic minority with an Indian father and an Irish mother.

Many are comparing him to the new French President Emanuel Macron. But there are more significant issues that make Varadkar’s election interesting.

Ireland has been a success story in the last three decades. The years of the Celtic Tiger just before and after the end of the 20th century were preceded by decades of migration. But the political strategy of attracting direct foreign investment thanks to a very attractive tax regime made Ireland one of the best performing countries for more than a decade.

The collapse that came in 2008 was mainly the result of an Irish obsession with investment in property. The prices of housing went astronomically high making the government happy with property tax revenue, and short-sighted bankers even happier with profits growth.

In his leadership campaign Varadkar made some important statements that, if followed up, may prove his true leadership qualities

When the slump came Ireland had to go begging to the IMF and the EU for a bail-out.

But Ireland proved to be a reliable debtor. It has recovered admirably despite obvious flaws in its political system.

Like in many small countries, Irish politics are dominated by cronyism and patronage. Both Fine Gael and Fianna Fail are centre right parties.

The Labour Party in Ireland has little clout, although it has often formed part of coalition governments led by one of the bigger parties. But Irish governments have one important value: at the right time they often take important decisions that may hurt a minority of people but ensure that public finances are kept sound.

In his leadership campaign Varadkar made some important statements that, if followed up in the next several months, may prove his true leadership qualities. He comes from a hard working middle class family. He has taken a clear decision against those who try to exploit social benefits. His most famous quote so far is that his party stands ‘for people who work hard and get up early in the morning’.

The comparison that some journalists have made of the new Irish Prime Minister to Margaret Thatcher are probably too stretched. Yes, Varadkar may want to break the culture of entitlement that some Irish, like many among us, have.

He has openly said that “We should not divide our society in two groups: one that has to pay for every public service they need, while others are convinced that they have a right for everything that the State can provide for free because others will pay the bill”.

The real test for Vardakar, like that for the new French President, will be his ability to meet the electorate’s expectations.

Personal taxation in Ireland is low compared to some EU countries. But the country needs to invest more in its social and economic infrastructure.

Ireland’s public health system is creaking under the pressure of cost cuts. It is not even free for all Irish people.

The divide between the haves and have-nots like in other western societies is getting bigger.

The educational system is similarly under strain. Ireland used to have one of the best educational systems in Europe but lack of investment in the last two decades has worried educationists as they fret that this will affect the country’s competitiveness.

The most challenging issue for Varadkar and his government will be managing the Brexit issue.

The UK is Ireland’s main trading partner and is likely to be the country most affected by Britain leaving the EU. This economic reality may open up again the possibility of a political union between Northern Ireland and Eire. No one really knows how the Brexit negotiations will evolve especially in view of the UK’s political instability.

Like Malta, Ireland has often come under attack from the EU and now from the US for its favourable tax regime. Changes in global fiscal legislation could be the most formidable threat to Ireland’s prosperity.

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